The Housing Crunch.

The United States is in the midst of a silent housing crisis. In late March, Andrew Cuomo, Secretary of the Department of Housing and Urban Development (HUD), announced that 5.4 million families were paying half or more of their incomes for rent. Cuomo noted that low income housing was in short supply. "This is the highest need for affordable housing" since the government began recording statistics in the early 1990s, said Cuomo.

According to HUD, affordable rental units dropped by 372,000, about 5 percent, from 1991 to 1997.

"In his Second Inaugural Address, FDR made his famous plaint, `I see one-third of a nation ill-housed, ill-clad, and ill-nourished,'" says Chester Hartman, executive director of the Poverty & Race Research Action Council in Washington, D.C. "Over a half-century later, one-third of the nation still is ill-housed--although the nature of the problem is different from the Depression era. We've done a lot to improve slum conditions and overcrowding.... The principal housing problem now is affordability--in its most extreme form, homelessness, which afflicts at least a million Americans. But for most others, it is simply paying more than they can afford and still afford other of life's basics: food, medical care, clothing, transportation, etc. Tens of millions of Americans--homeowners as well as renters--are paying 40 percent, 50 percent, up to 70 percent of their income for rent, mortgage payments, property taxes, insurance, utilities."

Why the housing crunch during an economic expansion?

Because those who have gained the most during the boom time have driven housing costs beyond the reach of millions of Americans.

"You're seeing a real bidding up in housing prices," says Dean Baker, the co-director of the Center for Economics and Policy Research in Washington, D.C. "When people make a fortune in the stock market, that money goes somewhere." In many cases, he says, it is going into land and real estate. Gentrification has wiped out blocks and blocks of affordable housing in city after city. Nationwide, rents have taken a steep rise--nearly twice the rate of inflation in general.

And though the number of millionaires in the country is up, for many the so-called boom has been distinctly modest. "The median wage is just getting back to where it was in 1989, adjusted for inflation," says Baker. "It's still below where it was in 1979." Given this, he says, it's not surprising people are having trouble paying for housing.

The...